1. Writing the Business Plan Entrepreneurship February 25, 2014

2. Axiom: Don’t forget the goal; make a profit.

3. Learning Objectives  Describe major components of an entrepreneurial business plan  Examine a plan from investor perspective  Assess benefits of a discovery process  Learn what not to do

4. Investor Evaluation

5. Top Level Sniff Test Significant, credible market opportunity? Significant, credible market opportunity? Realistic market engagement plan including competitive strategy? Realistic market engagement plan including competitive strategy? Management team complete and qualified…in place or planned? Management team complete and qualified…in place or planned?

6. Top Level Sniff Test con’t. Adequate resources (financial, equipment, facilities) available or conceivable? Adequate resources (financial, equipment, facilities) available or conceivable? Based on sound technical/scientific principles? Based on sound technical/scientific principles? Protection if based on proprietary technology? Protection if based on proprietary technology?

7. Evaluation: Quality of Concept Market Potential Market Potential Product Uniqueness Product Uniqueness Technology Robustness Technology Robustness Proprietary & Competitive Position Proprietary & Competitive Position External Assessment External Assessment

8. Evaluation: Quality of Strategy Strategy Focus Strategy Focus Management Team Management Team Operating & Marketing Plan Operating & Marketing Plan

9. Evaluation: Quality of Investment Opportunity Financing Financing Financial Projections Financial Projections Risk/Reward Sharing Risk/Reward Sharing

10. Evaluation: Quality of Plan Presentation Plan Format Plan Format Plan Readability Plan Readability

11. Fatal Flaws None! None!

12. Specific Plan Components

13. Outline No single right outline No single right outline However, every plan must have… However, every plan must have… –Executive Summary (2 to 4 pages) –People (1 to 2 pages) –Business Core (8 to 12 pages) –Financing & Liquidity (1 page) –Financial and Business Driver Appendices

14. Business Core Business Description incl. Problem & Solution and Value Proposition Business Description incl. Problem & Solution and Value Proposition Industry & Market Opportunity Industry & Market Opportunity Competitive, Sustainable Advantage Competitive, Sustainable Advantage Technology Position & Strategy Technology Position & Strategy Marketing & Sales Strategy Marketing & Sales Strategy Organization / Management Team Organization / Management Team Operations/ logistics Operations/ logistics

15. Financial Analysis Time Horizon: 3 to 5 years Time Horizon: 3 to 5 years Statements: Income, Cash Flow, Balance Sheet Statements: Income, Cash Flow, Balance Sheet Level of Detail Level of Detail Assumption driven Assumption driven Industry Benchmarks Industry Benchmarks –SIIA, Hoover’s, etc.

16. Executive Summary Final part of business planning Final part of business planning Selling document Selling document Assume broad distribution and no confidentiality Assume broad distribution and no confidentiality Typically delivered electronically Typically delivered electronically –Keep format simple in Word or use PDF 2 to 5 pages 2 to 5 pages

17. Content Company name and contact info Company name and contact info Business concept Business concept Opportunity, Industry, and Target Market Opportunity, Industry, and Target Market Competition Competition Value Proposition and Sustainable Advantage Value Proposition and Sustainable Advantage Go-to-market strategy Go-to-market strategy Economics including breakeven Economics including breakeven Management team Management team Offering, liquidity, use of funds Offering, liquidity, use of funds

18. Business Plan Customers Investors Investors –Individual –Institutional Bankers Bankers Management Team Management Team

19. Five Key Risks Development Development –Product or service actually created? Manufacturing/Operations Manufacturing/Operations –Produced in appropriate volume? Marketing Marketing –Sales volume achievable in time? Financial Financial –Profitable and realizable to investors? Growth Growth

20. Milestones Demonstrates operational orientation Demonstrates operational orientation Validate progress Validate progress But, can backfire But, can backfire

21. Timeless Advice The plan is nothing. Planning is everything. Dwight Eisenhower